Government grants full treasury bills at higher rates on inflation bets

The GOVERNMENT has made a full allotment of Treasury bills (T-bills) he offMonday, even as rates climbed across the board due to the persistence offlfears of the nation.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the treasury bills it auctioned off Monday as total bids hit P56.36 billion, nearly four times the original offer, but lower than the 63.865 billion pesos auction recorded during the previous auction.

Broken down, the BTr raised 5 billion pesos as planned via 91-day debt securities from 13.01 billion pesos in tenders. Three-month Treasuries hit an average rate of 1.085%, up 2.5 basis points (bps) from the 1.06% seen in last week’s offer.

He also borrowed the 5 billion pesos programmed through 182-day treasury bills, as the tenor attracted bids worth 22.42 billion pesos. The six-month average paper yield rose 0.6bp to 1.391% from 1.385% a week ago.

Finally, the government allocated 5 billion pesos to 364-day debt securities from 20.93 billion pesos in the context of tenders. One-year bonds reached an average rate of 1.584%, up 0.2bp from the 1.582% quoted in last week’s offer.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that inflation expectations had raised rates slightly, especially for 182 and 364-day Treasuries.

A bond trader also said the rate hike was expected ahead of the September inflation report, as most expect a higher impression.

“Note that the 91 days (debt securities) which has the most change from [the] the previous auction only brought in almost 1%. So we expect this to be the most sensitive future, ”the bond trader said in a Viber message.

A Business world poll of 17 analysts showed a median estimate of 5% for the September title inflation, or near the lower end of Bangko Sentral ng Pilipinas (BSP) estimate of 4.8% to 5.6% for the month.

If done, title inflation will exceed the target range of 2-4% of BSP for the second consecutive month.

It will also be faster than the 4.9% impression in August and the 2.3% a year earlier. It will also mark the fastest increase since 5.1% in December 2018.

The Philippine Statistics Authority will report in September infldata from theation on October 5.

The BTr will auction on Tuesday reissued seven-year T-bonds with a remaining term of six years and 10 months.

The Treasury is looking to raise P200 billion from the local market this month: P60 billion from the weekly offers of treasury bills and 140 billion pesos of weekly treasury bond auctions.

The government wants to borrow P3 trillion from domestic and external sources this year to help finance a budget ofFicit reached 9.3% of gross domestic product. – Jenina P. Ibañez

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